Still doubting the bull market after breaking through 14,000? What to do now: focus on ETH, forget about EOS, forget about DeFi

——Bull markets are born in despair, grow in doubt, mature in optimism, and die in excitement. (John Templeton)

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Yesterday, the counting of votes in the US election began, and the US stock market began to rebound strongly from the previous period of decline, and yesterday it showed a momentum of sharp rise - no matter who is elected, a big bull market in the US stock market is a high probability event.

After Bitcoin broke through 13,000 and hit 14,000 recently, it completed three attacks in a very short period of time. Although there is no scene of great momentum, the current bull market has sufficient volume. If we talk about the probability, there are three scenarios, and the probability is ranked from large to small:

First, Bitcoin continued to break upward strongly amid slight fluctuations, following the upward trend of U.S. stocks, and hit 16,000 or even higher in one fell swoop.

Second, Bitcoin will have a downward correction, but the squat is for a better sprint. The more corrections there are, the fiercer the upward rush will be. Then you can buy more depending on the situation and follow the trend to make big money.

The third is that we encounter an unknown black swan, such as the strong regulation or any other negative factors that we are worried about, which will cause a sharp drop in the market.

However, as we have said before, there is no point in predicting the market. The key is to determine what operations should be taken in different market conditions. We first assume that there are no extreme market conditions and only take corresponding operations based on the current bull market trend - respond to changes as they occur and follow the market. This is always the correct approach. There is no point in guessing or gambling.

In fact, this is the third US presidential election that Bitcoin has experienced, and the market's trading volume has doubled after the first two elections. Let's first look at the two previous elections in history.

Obama’s 2012 election victory drove the price of Bitcoin from $8 to $820 in two years (a 10,324% increase). Similarly, Trump’s 2016 victory drove the price from $670 to $17,350 in two years (a 2,586% increase).

Of course, there are many other factors involved. I can’t expect Bitcoin at 14,000 to rise to 140,000 US dollars, although many people think so. But there is nothing wrong with being cautious and optimistic.

In trading, following the trend is the easiest way to make money. As early as two or three months ago, a top trader in the cryptocurrency circle said on Weibo that shorting DeFi and going long on BTC is still very powerful.

Is it difficult to determine the trend? Livermore believes that its changes should be clear at a glance, but in fact, when we are in the market, most of the time we can't grasp it. For example, let's take a look at the trend of YFI, the leading project of DeFI.

In the trend of this coin, it is difficult for us to clearly understand what the trend is when we are in any part of it, but when we ignore all the small fluctuations and only think about the trend of DeFi, we will understand when the entire industry is enthusiastic and when the entire industry is cooling down, that is the trend.

As for the price of the currency, this trend is less obvious at smaller time levels, because the market keeps fluctuating. In recent days, the most obvious judgment I made about YFI is to short it if it falls below 10,000. I shorted from 10,500 to more than 8,000, and closed the position after the 50X full position short order gained 400%. But in fact, my target position for YFI is at least 5,000.

When the trend is down, when can I buy the bottom? I am actually a right-side trader. I don’t like to buy the bottom, and I can’t guess the bottom. However, my recent judgment on the price of coins included YFI8000, UNI 0.5, etc. Now, except for BTC and ETH, the others are about to come true - I thought it was an outrageous prediction at the time, but in fact, I was not right, I just hit the right sector.

Through YFI, we talked about the importance of trends. Trends are things that everyone can feel. Everyone feels that DEFI is dead, and this is the trend. On the other hand, everyone feels that Bitcoin is obviously going to become more powerful than before (just look at Grayscale's continuous increase in Bitcoin holdings), and this is also a trend.

What is the trend of EOS? In fact, the trend has been very obvious since the VOICE press conference. I cleared my EOS positions on that day and never bought them again. Everyone felt the weakness of EOS, and in that process, everything was proving the change of trend.

For example, BM’s series of remarks, especially his recent remarks about banning Chinese players, make people not hate him, but just want to laugh. What kind of love made us imagine that EOS would become the 3.0 version of blockchain? Take a look at the trend chart of EOS:

The trend has changed since that press conference in 2019. What is a trend? To a certain extent, it is the consensus of everyone.

In the cryptocurrency world, the trend of Bitcoin will deeply affect the trends of many other currencies, but despite this, each currency still has its own trend.

In the development of DeFI and decentralization, many people may still have illusions, such as the representative UNI, what is its trend? Its trend is that everyone finds that decentralized exchanges may just be a beautiful imagination.

From a regulatory perspective, it cannot develop because without regulation, another Silk Road will be allowed to exist. In addition, traditional centralized exchanges such as Binance are powerful and are now embracing decentralization. From a practical application perspective, its security cannot stand the test, and no one will put hundreds or thousands of bitcoins on it. From a user experience perspective, problems such as high transaction fees and large slippage cannot be solved at present.

Therefore, the trend of UNI will flow into the sea and never return:

If I were to say something a bit bullish, my first bullish observation point for UNI is 0.5 - but the price prediction is just for fun, don't take it too seriously, because if the centralized exchange really encounters strong regulation and collapses, UNI's trading volume may rise sharply, causing the price to rise - but that is not the trend yet, the trend is still the three points I mentioned above.

In addition, from some details, compared with the three major platform currencies, UNI is a deflationary currency because of destruction, while UNI is an inflationary currency. After 4 years (note, 4 years), the annual inflation rate is about 2%. The total amount of UNI is 1 billion. Except for the 15% of about 1.5 billion tokens given away, the rest will basically be released within 4 years.

In addition, there are currently about 770,000 tokens generated every day, which means there is a selling pressure of 1.5 million US dollars every day. It should be noted that the overall trading volume of UNI is still relatively small. Who can withstand the selling pressure of tens of millions of RMB?

As for the current price of UNI, the current trading volume is $200 million per day, the handling fee is about $690,000, and UNI can get $110,000 in dividends every day. This amount is a drop in the bucket in the face of huge selling pressure. And the current trading volume of Uniswap is shrinking every day.

So in the face of a relatively certain Bitcoin market, why should we bet on weaker coins like UNI and YFI? Focus on BTC, and then on ETH.

The market is the smartest. Currently, ETH is the only currency besides BTC that is highly recognized by the market. And at present, think about what the consensus of the entire market is about it?

The market is generally optimistic, especially after Vitalik Buterin tweeted yesterday that ETH2.0 will be launched on December 1. I immediately started to go long at that time and made about 4 times the profit before going to bed. For spot players, as long as the trend does not change, don’t let go, and don’t even look at the market. Just read the articles every day. I am a contract player, and yesterday was a confirmed market, so I didn’t want to keep the high-multiple long positions overnight.

After December 1, more than 500,000 ETH will be needed to pledge before 2.0 can be launched. In fact, it is still a long way from the real launch, but whether it is the future 2.0 or the current ETH1.0, they are always optimistic because of the market consensus, so we just need to focus on this kind of optimistic currency.

In life, the most frightening thing is to love the wrong person and be betrayed; in the cryptocurrency world, the worst thing is to love the wrong coin and lose all your wealth. Back then, Bitcoin was 8,000 and EOS was 30. Now Bitcoin is 14,000 and EOS is 2. Let us mourn for our brothers who are still standing guard at the 100-meter high of EOS.

Finally, regarding the trend market, it is most important to review these classic quotes from Livermore:

As long as you recognize where the trend is and steer your speculative boat along with the trend, you can benefit from it. Don't argue with the market, and most importantly, don't compete with the market.

Once the price enters a clear trend, it will automatically move along a specific route throughout its entire trend.

"Rome was not built in a day", a truly significant trend will not end in a day or a week, it takes time to complete its own logical process. It is important that a large part of the market movement occurs within the last 48 hours of the entire movement process, and this period is the most important time to enter or exit the market.